Seoul (AFP) – South Korean chip giant SK hynix said on Wednesday it was considering a US stock market listing using treasury shares as part of efforts to boost shareholder value. SK hynix is one of the world’s leading memory chip makers — along with Samsung Electronics — manufacturing chips essential for artificial intelligence products and the data centres that the fast-evolving industry relies on.
In a regulatory filing, SK hynix said it was “considering various measures to enhance shareholder value, including listing on the US stock market using treasury shares, but no decisions have been finalised yet.” The company said it was considering listing its treasury shares as American Depositary Receipts (ADRs), instruments representing a foreign stock that is traded on a US exchange. “We will make a further announcement once the specific details are finalised, or within one month,” it added.
SK hynix shares were up 4.6 percent in early trading in Seoul. Industry sources have speculated that SK hynix could be seeking underwriters for a potential ADR programme using treasury shares — shares bought back by the company that issued them. ADRs, issued by US depositary banks, allow foreign shares to trade in the United States like domestic stocks.
South Korea’s government has said it will triple spending on artificial intelligence next year as it hopes to propel the country into the ranks of the world’s top three AI powers alongside the United States and China. Analysts say SK hynix’s US listing could unlock pent-up valuation in the South Korean market by drawing in global investors. They are also seen as potentially narrowing the valuation gap between the South Korean chip giant and US peers like Micron.
In October, the firm reported record profit in the third quarter, boosted by strong demand for artificial intelligence. The strong performance followed signed partnerships with AI giants including OpenAI and Broadcom to supply advanced memory chips. South Korea’s presidential office is also set to hold a meeting on its national chip strategy Wednesday, attended by government officials as well as executives from Samsung and SK hynix.
© 2024 AFP
